Wednesday Jan 22, 2025
Wednesday Jan 22, 2025
Wednesday, 22 January 2025 00:20 - - {{hitsCtrl.values.hits}}
By Wealth Trust Securities
The Secondary Bond market yields continued to increase with two-way quotes closing the day higher. However, renewed buying interest was seen kicking in at the elevated levels which curtailed further upwards movement. Trading activity and transaction volumes were seen at healthy levels.
The 2026 tenors continued to buck the trend and saw yields remain relatively stable with the 15.05.26 maturity trading at the rate of 8.90%-8.89%.
However, the rest of the yield curve was seen edging upwards. The 2027 tenors of 01.05.27 and 15.09.27 were seen trading at the rates of 9.75% and 9.85% respectively. The 15.01.28 and 15.03.28 maturities saw yields move up the ranges of 10.10%-10.15 and 10.16-10.21% respectively. The 01.05.28 and 01.07.28 maturities were seen changing hands at the rates of 10.31%-10.33% and 10.50% respectively. The 15.09.29 maturity was seen trading at the elevated level of 10.85%. The 15.10.30 maturity was seen trading at the rate of 11.31%.
This comes ahead of the Treasury bill auction due today, which will have a total amount of Rs. 155 billion on offer, an increase of Rs. 48 billion over the previous week. This will consist of Rs. 35 billion on the 91-day maturity and Rs. 50 billion on the 182-day and Rs. 70 billion on the 364-day maturity.
For reference, at the previous Treasury bill auction conducted last Wednesday (15/01/2025), weighted average rates declined across all three maturities for the 6th consecutive week. As such rates were seen continuing on a downward trajectory, with a reduction in yields observed on at least one tenor over the last 10 weeks. Accordingly, the weighted average rates on the 91-day tenor dropped by 14 basis points to 8.33%, the 182-day tenor by 16 basis points to 8.44% and the 364-day tenor by 10 basis point to 8.80%. Total bids received exceeded the offered amount by 2.98 times, and the entire Rs. 107 billion on offer was successfully raised at the 1st phase in competitive bidding. This prompted the opening of the 2nd phase across all three tenors, which was also heavily oversubscribed. An additional amount of Rs. 10.70 billion, being the maximum offered, out of a total market subscription of a staggering
Rs. 126.65 billion was raised at the 2nd phase.
The total secondary market Treasury bond/bill transacted volume for 20 January was
Rs. 7.20 billion.
In money markets, the weighted average rates on overnight call money and Repo stood at 8.00% and 8.02% respectively yesterday.
The Domestic Operations Department (DOD) injected an amount of Rs. 15 billion via a term reverse repo auction at the rate of 8.10%.
The net liquidity surplus stood at Rs. 122.45 billion yesterday. An amount of
Rs. 1.81 billion was withdrawn from the Central Banks SLFR (Standing Lending Facility Rate) of 8.50%, while an amount of
Rs. 139.26 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 7.50%.
Forex market
In the Forex market, the USD/LKR rate on spot contracts closed the day depreciating Rs. 297.65/297.80 as against its previous day’s closing level of Rs. 296.90/297.10.
The total USD/LKR traded volume for 20 January was
$ 38.10 million.
(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)
